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Political spending of electric utilities


Term:

Summer

Department:

11: Urban Studies and Planning

Faculty Supervisor:

David Hsu

Faculty email:

ydh@mit.edu

Apply by:

5/5/2020

Contact:

David Hsu, ydh@mit.edu

Project Description

This is a continuing project to study how political spending by utility companies affects their regulators. We focus on the regulation of utilities because they are one of the leading opponents of climate policies and renewable energy. As regulated monopolies, the profits of electric utilities depend on how much they have invested in the past, and at what levels regulators set their allowed rate of profit. Regulators also determine whether any new firms or technologies are allowed to compete with existing firms or technologies. As a result, utilities have generally not sought to embrace new renewable energy sources, even when they are cheaper, and have fought climate policies when they have been introduced. Utilities are regulated by state public utility commissions and legislatures. Political spending is an important issue because in the wake of the Citizens’ United ruling (2010) at the U.S. Supreme Court, many political groups including utilities, energy conglomerates, and environmental groups have sharply increased their political spending, in the form of campaign contributions, charitable giving, and issue advocacy to political candidates and parties. This research seeks to understand if political spending has any measurable effect on the activities of PUCs, in terms of rate setting or judgements that have a direct economic effect on the utility itself. Work will consist of: building, adding to, and checking an existing database that includes: state- and local-level political spending to candidates, parties, and charitable organizations; commissioner appointments by political officeholders and parties; rulings on rate cases and allowed expenditures by utilities; and state-level ballot initiatives related to energy and environment. Students will learn, extend, or use the following skills: gathering and working with multiple sources of data; data analysis; and understanding of how the energy industry is regulated. You will work with a professor, graduate student, and possibly other undergraduates.

Pre-requisites

Data analysis and cleaning skills. Familiarity with Excel and R preferred, also possibly Python.